Canadian housing boom over
This from today’s Globe and Mail.
It’s time for Canadians to bid the housing boom farewell as data for the first quarter of the year, released Thursday by the Canadian Real Estate Association (CREA), showed a 13 per cent tumble in existing home sales year-to-date.
“Canada’s six-year housing market boom is officially over. Aside from a few choice Prairie locales, sales are melting faster than this year’s snow pack,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., said in a research note.
Double-digit declines in sales activity in “more markets than you can shake a stick at,” suggest the weakness has spread across Canada rather than being centered in any specific market, Mr. Porter said in an interview.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
71 comments so far. We'd love to hear your thoughts.
May 13th, 2009 at 3:59 PM
Haha, I came on here to post this article, thanks Norm!
“In its statement, CREA also said seasonally adjusted sales activity hit new quarterly records in Regina and Saskatoon, but data for those cities were listed as not available in the tables included with the release.”
What’s this mumbo jumbo about? Seasonally adjusted? Data not available?
May 13th, 2009 at 3:59 PM
You’re probably aware that SRAR has not reported yet for March? That’s where the MLS stats come from.
Records? Unit sales are also starting to drop here as my March stats clearly show. I guess that prices are at record highs though.
May 13th, 2009 at 3:59 PM
Does an article like this affect a potential homebuyers decisions? hmmm…
Hopefully the CREA predictions are more reliable than the NAR (US): http://seekingalpha.com/wp-content/seekingalpha/images/housing_bellwether.JPG
May 13th, 2009 at 4:00 PM
Heather, I’m not sure if anyone can outresearch Norm.
We were late to this whole boom game. Does our ‘party’ end at the same time as the rest of the gang? Interesting summer coming.
May 13th, 2009 at 4:00 PM
The boom may be over, but people still can’t afford houses.
We need a wage boom to go along with all this unnecessary and baseless inflation.
Following the boom, Canada as a whole is stuck with more debt and a small fraction of its population has suddenly got more money than the rest.
Some boom.
May 13th, 2009 at 4:00 PM
I think stats canada came out with a report that said Saskatchewan had the greatest $ increase in wages. Sask employers are slowly starting to match wages found in Alberta. If this is the case home prices will continue to climb
May 13th, 2009 at 4:01 PM
We also had the highest inflation rate (according to the National)– 3.2 percent vz .08 for Toronto. And the highest house sales.
May 13th, 2009 at 4:01 PM
Norm are you hiding the Fat Lady hiding in Bien Fait?
May 13th, 2009 at 4:01 PM
story is typical of a national rag…based out of the east. If toronto’s market is down it automatically means the entire nation is in the tank as well
May 13th, 2009 at 4:01 PM
It seems a little short sighted to call the boom over. Sure housing sales are down, but the article states that prices are still expected to increase this year. Perhaps this is just a “blip” on the radar and everything will pick back up in the summer months?
I’m just skeptical and slightly bitter about the current housing situation. As much as I’d like to believe this, I’m not holding my breath.
May 13th, 2009 at 4:02 PM
So the Cycle (or game if you like) is nearing the peaking, perfect timing. All that’s left to do is slowly cash in for the 7 digit profit, buy a hole bunch units at River Landing (these events should tone down the asking price to the mid $400s / sqf) and then go and find a nice beach to tan myself on for a couple years.
I suspect because of the continuing economic activity that is happening in Saskatchewan there will still be a small increase in Q2 (3 – 4%) and then flat or a 3 or 4% decrease to the end of Q4.
It’s all good
Heather enjoy your crash, it is what you wanted.
So i have no social conscience, but i will have a nice tan.
Cheers
May 13th, 2009 at 4:02 PM
Once again, the shallow and insecure values are showing through of those who would seek to profit off of others.
There isn’t a single time I can think of where I’d rather have investors over people’s own personal investment in a community.
Oh well. I think there’s a lot of “I told you so” coming down the pipe…
May 13th, 2009 at 4:02 PM
Yeah the Hun is obviously a ***.
May 13th, 2009 at 4:03 PM
I know people don’t want to see the prices go any higher, but does anybody see a problem with a drastice decrease in house prices?
May 13th, 2009 at 4:03 PM
Carl, I see your concern, but we need in many ways nothing short of a complete turnaround in economic and social policy right now.
Again – my uncontested point: There is no way to hide the ultimate outcome of letting the rich continue to run crazy with industries and the economy.
Canada is following exactly in the footsteps of the USA right now, in spite of such obvious signs of bad policies.
http://duggmirror.com/politics/What_8_Years_of_Bush_and_Cheney_Have_Done_to_the_U_S_Economy/
We still laud the rich and reward greed. We still allow corporations to reduce quality in products and service while increasing costs without basis.
The insane freedom junkies will scream bloody murder, but Canada needs accountability in business. Possibly more than it needs in government.
The desire for profit is nothing more than a manifestation of the many insecure people out there right now who think money is a reflection of their character.
A decrease in house prices coupled with the insistence that the homes go to those who need them would probably fix everything.
May 13th, 2009 at 4:03 PM
Strikes me as quite ironic that for all the so called accused whining that the pro-boom people did about the “negative people” now that the potential for the opposite to occur is not just a bunch of “whiners” hoping and wishing, but actually a potential decrease or slow down, they are crawling out of the woodwork to defend there lowlife position.
Sorry, I call it as I see it. If you are an investor in Real Estate to make money and have contributed to the dire straits of many, while lining your pockets. I consider it low life behavior. There are better ways to make money than downgrading the poor and middle class. What happened to Saskatoon was insane, and I didnt want to leave, but I felt I had to, probably others are looking at or may do the same, all the while some are sitting out in AB or whereever never intending to do anything more than flip some inventory.
Sure its a free society and we can all do as we will and all of us could have attempted to take advantage the same way. But some lacked the fund or ability to do so. I just love how some defend that position. I don’t have any quams with those that were moving back to Saskatoon to live, thats what we had planned on.
What really irked me – overbids after overbids. People thinking that all of a sudden their house that was worth 150 a month or two ago is now worth 200-250 because of what their neighbor was able to get. Personally we were not going to have any of that B.S.
Heather and Jesse, I sure hope you see some brighter days now.
May 13th, 2009 at 4:04 PM
It may be premature to say the boom is over in Saskatchewan. The boom is certainly over in Windsor and probably Toronto. With oil hitting $117 a barrel and this week’s potash contract renewal with China tripling prices and interest rates heading downwards I just don’t see a flat or declining market ahead.
May 13th, 2009 at 4:04 PM
“cam said:
I think stats canada came out with a report that said Saskatchewan had the greatest $ increase in wages. Sask employers are slowly starting to match wages found in Alberta. If this is the case home prices will continue to climb
”
REALLY CAM? Why would house prices rise? They are already MORE than Edmonton, and wages are less than Edmontons by thousands a year. People in Alberta make more, and short of freak places like Fort Mac, many have cheaper housing, that is decreasing in price!
May 13th, 2009 at 4:04 PM
“Jim C. said:
It may be premature to say the boom is over in Saskatchewan. The boom is certainly over in Windsor and probably Toronto. With oil hitting $117 a barrel and this week’s potash contract renewal with China tripling prices and interest rates heading downwards I just don’t see a flat or declining market ahead.
”
Well $100 a barrel oil and climbing wasn’t enough to prevent Edmonton and other places in Alberta from declining, or at least topped out prices. For similar homes in Calgary (remember the average house there is newer, bigger, and nicer than Saskatoon because it’s been booming for decades) they are often actually cheaper than Saskatoon! And Saskatoon is no where near the metropolitan centre of either Edmonton or Calgary, which will continue to make it difficult to out recruit either of those cities, especially with Edmonton, it’s on par river, better university and now lower housing prices and still higher wages.
May 13th, 2009 at 4:05 PM
Jim (s),
Do you think it’s possible that Saskatoon will become another “freak place” like Fort Mac? It seems that people from all over the place are just so bullish on Saskatchewan’s future. I would love to see this ease off for a bit, and I think it probably will but the massive amount on interest concerns me from the housing perspective. Again, Saskatoon is typically a 4000-4500 unit a year resale housing market. Push that to demand for 6000 and it’s almost impossible to avoid what’s happened here lately.
May 13th, 2009 at 4:05 PM
Saskatoon may be another weird market like Fort Mac now, but while Fort Mac is inaccessible and makes sense for being expensive that way, Saskatoon is surrounded by fields to build on, a well rounded city, and not that close to a lot of the natural resource companies. It should get cheaper as supply catches up, and construction companies are going to keep covering those fields with houses as long as it’s profitable. Has anyone actually considered how puny our downtown is? There aren’t a lot of coporate head quarters there. Potash corp is just one company, with field operations not actually that close to here. And all that oil money? Corporate headquarters are all back in Calgary (or the States etc..) all experiencing decline in demand.
It is just not worth spending $600,000 on a new house here. As long as some one isn’t directly employed in potash, why wouldn’t they mover to Alberta for higher wages which are still increasing (more than ours last year), or Kelowna for a beautiful, warm, sunny, dry place? Yes our river is nice, but for that kind of money, I’d retire to the Okanagan quick if I didn’t need to work anymore. I just hope my house is still worth this much by then.
May 13th, 2009 at 4:05 PM
Hmmmm . . . . I take your point about Edmonton/Calgary but the boom there had been going for years and was bound for a correction. The boom hasn’t been going as long in Saskatoon. Also, the price correction in Alberta is partly due to the Saskatchewan economy. For so long, Alberta was the only game in town and so people left Saskatchewan for Alberta. Now there is no reason to do so. As someone who follows commodity prices very closely, the Alberta RE slowdown was also caused by tanking natural gas prices a(which is now recovering) and the royalty changes both which hit the natural gas industry quite hard. Uranium prices have corrected but potash prices are rising by the day with no end in sight in an increasinly hungry and crowded world. Believe it or not (and I do not live in Saskatchewan), I actually think Saskatchewan’s economy is much more stable than Alberta as it depends on a much more diversified commodity list. Alberta’s economy is tied to two commodities really: natural gas and oil. Saskatchewan has those but a lot more which have different cycles. The final distinction between Alberta and Saskatchewan is that Alberta overbuilt their housing over many years and so the supply/demand equation is out of wack. I just don’t see that right now in Saskatoon or Regina. To be honest, at the risk of sounding like one of those tiring bullish boosters, I think Saskatchewan right now has one of the strongest economies in the world. And why not? You are a premier controller of products more valuable than gold and your companies such as Potash Corp. have tremendous almost monopoly market power over strategic commodities.
May 13th, 2009 at 4:06 PM
“story is typical of a national rag…based out of the east. If toronto’s market is down it automatically means the entire nation is in the tank as well”
Yup.
May 13th, 2009 at 4:06 PM
so we’re back to a “normal” market. it’s a good thing, too much of a sellers market and it’d have to take a good correction down , this way it’ll just soften, listings sit around a bit longer, sellers need to be realistic and buyers can take time, carry out their due diligence and negotiate a good deal. what the heck’s wrong with that? besides, interest rates will continue to fall and the market will be just fine thank you. 5 year from now you’ll say you are happy you bought. canadian fundamentals are strong, western canada is where it’s at for the millenium, the economy of the country is tilting west..yippee! out day to shine!! p.s. don’t forget mr. harper’s corporate tax slashing…just sit back and watch all the international companies that will be opening up in canada…western canada that is! that’ll mean job and people go where the jobs are and then they buy homes. canada rocks baby!
May 13th, 2009 at 4:06 PM
Well Jim I disagree that there is any BOOM in Saskatchewan, the only thing booming is speculators pockets from unrealistic real estate BOOMING prices generated from hype. Have you ever heard of Bre-X? Maybe Bre-X is a strech, but it was built on hype. People are hyping Saskatoon and Saskatchewan and that is why the prices have gone the way they have. As I have stated before, a boom brings thousands of construction workers to your city and construction workers, to me, are the biggest sign of any boom. Toronto, Vancouver, Calgary and Edmonton have all experienced the migration of construction workers to their cities because they were booming. Where are the construction workers? Oh yeah in Alberta where Edmonton alone has $40,000,000,000 (thats billions) of work scheduled for the next ten years. (Fort Mac another $60,000,000,000). Alberta’s economy is driven by oil and especially oil sands. Do you realize how many workers are required to just operate the oil sand mines that they have? Or that every mine is constantly in construction mode because they get huge tax breaks if their mines are considered under construction. So players like Suncor and Syncrude all always Expanding (generating more oil money) and are always under construction. Now that’s money, what does Saskatchewan have, Potash Corp and Cameco who operate small plants (not that many need to be there to operate these mines) and they are pocketing all the cash. How is anyone benefiting from the high prices of Potash, they are expanding to the tune of 4 billion I believe but that pales in comparison to Alberta.
May 13th, 2009 at 4:07 PM
“Once again, the shallow and insecure values are showing through of those who would seek to profit off of others.
There isn’t a single time I can think of where I’d rather have investors over people’s own personal investment in a community.
Oh well. I think there’s a lot of “I told you so” coming down the pipe…”
Haha, Alex is still giving ‘em hell. Almost warms my heart to hear him fighting so, deep inside his own insecurities. He’s tough this Trauzzi guy, wouldn’t want to meet him in a dark alley. Luckily I live in the sun and warmth of my own wealth.
May 13th, 2009 at 4:07 PM
Norm,
With all this doom and gloom I was thinking this is golden opportunity for a clever Saskatoon Realtor. It’s a new improved Find the Fat Lady contest.
Set up a cheezy prize thing for charity or a gift basket of blankets for the homeless. Plunk down a Fat Lady Sign somewhere between Lac La Ronge and Bien Fait. If she’s a blow up doll she can’t be near Quill Lake. Maybe you could do a thing on a grain silo – one of the big old ones. Now that would be spectacular. Pretty, and easy to find. Of course this isn’t meant to be a brain teaser so bigger is better right! I’m sure all the bears will be smilin when they see her in all her glory. Easy on the cleavage though. We don’t want them hurting themselves as they fall off their tractors.
For the winner who finds her first there’s a special treat. They get special “doomer” invitations that come with front row seats to her June concert – part of her “Cry-a-Lot” tour. Guaranteed to be a winner, the concert will be at the Moose Jaw airport where The Fat Lady will sing her latest release called “I TOLD YOU SO”. Added attraction for the gloomy doomers will be the SnowBirds doing a fly past with their ‘Twinkle Lights’ OFF. .>)
May 13th, 2009 at 4:08 PM
Wesco,
The investment and development of Potash in SK will be much greater than 4 billion. The number will likely be closer to 10 billion over the next five or so years. We will likely see 2-3 brand new mines constructed. The last new mine built for potash in SK was in 1971. As stated in an article from the Globe and Mail that was posted early, the boom has not yet begun.
May 13th, 2009 at 4:08 PM
maggie-vanouverreflections blog, are you being sarcastic? I couldn’t tell….
Anyway, isn’t sarcasm the purview of the ignorant?
May 13th, 2009 at 4:09 PM
I do hope that Saskatoon doesn’t go the way of Fort Mac as Fort Mac is one ugly, industrial wasteland. For that matter, Calgary is a sterile, white collar corporate wasteland. Saskatoon is way more charming than either place and I hope it retains that charm no matter what happens economically. On the issues of economic, we have been focusing on potash but there is also the Bakkan formation which supposedly has more light oil than the Alaskan North Slope. I imagine when that gets developed, there will be a further burst in economic activity in Saskatchewan.
May 13th, 2009 at 4:09 PM
Do we really think Potash will support our huge boom? Anyone ever been to Belle Plaine? Not a booming community, sure high potash prices are good, but Alberta, after all its booming, was matched price wise in one year by Saskatoon, and wages are higher in Alberta. Saskatchewan may have potential, but right now wages are much lower, and prices oddly higher, so unless wages meet and exceed those in Alberta (which they don’t) Sask is over priced, and we need wages to catch up just to justify prices that already exist here. Point of story, I’d think about selling my Saskatoon house now at the peak and living in rental for the next few years before buying at a low … however, that’s about as dumb as buying now with mortaged/loaned to the hilt money I don’t have. Key, buy a house when you need it. Buying in Saskatoon as an investment and you deserve to lose a lot.
May 13th, 2009 at 4:09 PM
You ever spent time in Calgary “sterile, white collar corporate wasteland”? It’s got an NHL team, a nice built up down town from a shopping and culture standpoint, and a few nice cultural areas that kick Broadway’s butt, plus outdoor stuff in the nearby mountains.
May 13th, 2009 at 4:10 PM
I agree that in a market near the peak, it makes sense to only buy within your means for a house you actually like, otherwise, extending your loans too thin leaves you vulnerable to loose a lot of money.
May 13th, 2009 at 4:11 PM
Jim C,
Actually Fort Mac is not an industrial wasteland, have you ever been here? The city is on the river, and a much more scenic river than Saskatoon. There’s beautiful golf courses, the Alberta Amateur was played here last year. Lastly the closest industrial “wasteland” is 35Km out of town. There is no sign of any industry in the city itself, it’s actually quite a beautiful city. Now if you would have knocked fort mac for the people,(rude, transient,rich, druggies, poor service sector) then I would have agreed.
May 13th, 2009 at 4:11 PM
Callum,
u said “rag out of east”
To confirm your thoughts here is the bit from CREA’s report [http://creastats.crea.ca/natl/] to confirm the influence of the Toronto market….note the last sentance. If memory serves I’ve seen this quoted as being as high a 30%. I can’t confirm that statement.
“Seasonally adjusted MLS® sales activity in Canada’s major markets declined 7.1 cent to 81,747 units in the first quarter of 2008 compared to the fourth highest level on record in the previous quarter. The decline in activity largely reflected fewer sales in Toronto in February and March. Sales activity in Toronto accounts for about one-quarter of all existing home sales in major markets in Canada”
Of course add snow and cold to the “load” and it could be 30%.
May 13th, 2009 at 4:11 PM
I find people who rag on Fort Mac, Calgary, Rainy Kelowna (has cacti on some hills and summers every bit as hot as here) do so because they’ve never been to these other places. Maybe that would be a good way to ease the “housing crunch” get people to go to beautiful and cheap places like Prince George and realize Saskatoon is a pretty average place to live. Unfortunately, if people realized they could afford to live in Kelowna now, that might lead to an instant crash.
May 13th, 2009 at 4:12 PM
Oh no, the my city is better than your city meme. Leave it off boys, no one wins.
Oh crap, I’ll comment anyway having spent time in both Saskatoon and Calgary. Both downtowns suck! Vancouver has the only real downtown in western Canada. Argue if you like, you know it’s true. But Saskatoon has small town charm that big city dwellers dream of. Calgary has the rockies, that’s the best I can say. And the Flames I guess, Canucks fan here, don’t expect any kudos. Calgary also has my awesome cousin the doctor and she’s one smart lady, could have lived anywhere in the world and she chose Calgary, gotta mean something.
Oh dang now I’ve done it.
Larry, TO is a big market to be sure. I think they also take up 30% of the nationally mandated BS quota.
May 13th, 2009 at 4:12 PM
Greetings from the “sterile, white collar corporate wasteland”, lol. Just thought I’d toss a couple points in.
While I agree that the Globe and Mail does have a hard time remembering that there is a Canada west of Kitchener…please don’t disregard the article because of that. The fact is sales are plummetting across much of Canada (not just Toronto). Calgary’s sales are up a bit in April, and we’re still going to finish the month down around 30% from last year. My understanding is that sales are dramatically down pretty much everywhere except SK, MB, and NL.
I agree with a lot of what Tony said. While wages may be on the rise in Saskatoon, they still pale in comparison to what is available in Alberta. Lots of people I know finishing university are still finding jobs in the $30 – $50 range (when they can find them at all – Saskatoon is still a very blue collar town). The data entry clerk and admin assistant at my office make that much. After doing a quick scan of jobs on workopolis, I would estimate that wages in Calgary are still at least 30% higher for jobs on average.
The point I’m trying to get at is where is the justification for Saskatoon’s RE prices? And don’t just say “the economy is booming”. I was looking at Saskatoon’s mls and a starter home in Willowgrove is now going for $350,000 (!!). I can get the exact same house in a comparable neighborhood here in Calgary for $50,000 more (and if the RE situation continues as it is here, they should be at par by the end of the summer). The only difference is that instead of working for $40k a year, I have an employer that’s paying me six figures as of my second year with them. I don’t know nearly enough about Saskatoon’s RE anymore to make a guess about its direction, but if Calgary is having a hard time maintaining its high RE prices, I’d be awful worried about Saskatoon.
I’ve also never fully understood the logic of how higher commodity prices will benefit the average citizen. Having grown up in a potash mine town, trust me when I say that they are not very labor intensive things to run (especially solution mines). Good paying jobs, but not a lot of them. And people will be noticing the effects of $117/bbl crude when they fill up their tanks this summer @ $1.50 a litre, long before they ever notice any effect on their paycheque.
Don’t get me wrong – I agree that Saskatchewan’s economy is much more vibrant and diverse than Alberta’s. Having grown up in a rural center, what nobody has mentioned yet is that wheat is currently at around $9/bushel and will likely be going much higher. Saskatchewan has a lot of things going for it that Alberta does not (agriculture, potash, uranium, forestry, etc), but it seems that it’s trying to catch up to Alberta in one fell swoop. Alberta’s boom (and subsequent bust) of the 70′s laid the foundation that it’s now decade long boom has been building on. That’s why when you come out to this “sterile, white collar corporate wasteland” (sorry, had to toss that in again, lol) you’ll see a downtown that is being transformed with tens of billions of dollars of construction. When I come back to Saskatoon, I see the new Credit Union across from the Bay. Am I missing something?
May 13th, 2009 at 4:12 PM
I will correct myself there – I really like the Victoria downtown. Beautiful and home to some of the finest micro-breweries in North America. Do yourself and favour and do a pub crawl in Victoria sometime soon.
May 13th, 2009 at 4:13 PM
Warren your not missing anything. That is the situation Saskatoon is in. And realtors are still telling people that their property is going to increase by another 50% over the next, yeah right!! B.S much, i think so!!
May 13th, 2009 at 4:13 PM
Kelowna and Victoria are nice places to live but neither have economies that can justify the sky high cost of living there. And I mean sky high by comparison to Saskatoon. Kelowna is half the size of Saskatoon, doesn’t have a major university and very low wages in a service type economy. The prices there are truly amazing.
May 13th, 2009 at 4:13 PM
Kelowna not so much.
Victoria, on the other hand, has everything going for it. It’s full of government workers (when was the last time a government downsized?) and the best, by far, climate in Canada for a major city.
May 13th, 2009 at 4:14 PM
Callum, I can see you’re up to your usual asinine provocative statements again.
As far as everything you’ve shown, you’re a very poor and ignorant man with a very broken ego to want to assert your self worth so hard against others…You’re obviously compensating for something.
I just went to a used junk sale at a community center, shopping for a wedding ring with my fiancee, hit the downtown library for some books, ate at a small pita bakery, raked my lawn and now I’m sitting on my nice hardwood living room floor pursuing some hobbies & commenting.
It’s only 2PM. What to do with the rest of my day!?
When I was in Calgary any two of the above would have claimed my entire day and been endlessely frustrating. If I was in Toronto or Vancouver/Victoria? I think one would have sapped me to near-death! Okay, a bit of an exaggeration but, really.
Give me a break.
All I’m hearing right now is a lot of the usual high-life metro bravado. None of these things are truly desirable once you’re in them. It’s a race to the rat race in here right now and people are forgetting so much of what’s important.
Everyone I speak to in big cities mourn the loss of small businesses because of the reductionist trends in markets. Big companies slowly absorbing all the competition. Someone commenting about the attitudes of Bell captures it perfectly:
“I see it as a prime example of why “the invisible hand of the market” is a hoax cooked up by neo-cons and half-baked economists. We’ve seen just how well the market regulates itself in recent months through devastating blows to the global economy as a result of unchecked greed and avarice in the U.S. through sub-prime loans.”
The loans bit drifts off into another topic but the sentiment couldn’t be any more true. Big cities means lots of people with no concept of the real damage being done by allowing things to be so profit driven.
It’s okay though. A new left is waking up – not nearly fast enough, but the greedy will be revealed for the control freaks they really are. This comment stream already has proven that.
(and if you’re too lazy to read up for that, don’t blame me)
May 13th, 2009 at 4:14 PM
Alex,
it’s one thing to shop for a wedding ring at a used junk sale but to take your financee with you there to look???
May 13th, 2009 at 4:14 PM
Larry,
“a new improved Find the Fat Lady contest”
I love it. This could indeed be the promotion of the year.
“The Fat Lady will sing her latest release called “I TOLD YOU SO”.”
With an encore performance of “Don’t blame me! I didn’t do it!”
May 13th, 2009 at 4:15 PM
Alex, big cities have communities, you can buy a ring, go to the community centre, a junk sale for some reason all within a couple km of anywhere in any dec sized city, ie. Millwoods in Edmonton. Also, if you’re all about closeness, move to Humboldt. It’s got a couple jewelry stores, mall, community centre, indoor pool, rink, bowling ally etc. All within 5 minutes of anywhere, the fact that it only has 5,000 people, means people do like big city things, even given drives of up to 30 minutes in Stoon if crossing river near rush hour. Other than that, your reply has little to do with the theme of whether or not a boom is justified, and fundamentals of the economy. Maybe you should write a letter to the editor of Planet S instead.
May 13th, 2009 at 4:15 PM
I agree with Tony as well. Saskatoon, fundamentals or not, is still playing catch up to high Alberta wages, while house prices caught up and surpassed many areas with higher wages. And Kelowna is a beautiful place, has a suprising amount of industry (West Bank)and employment and a lot of people who move there (if they can afford it) after working in places like Calgary or Saskatoon so that one day they can live in near paradise.
May 13th, 2009 at 4:15 PM
Warren,
It’s still nice to get a little perspective from a “white collar corporate wasteland.” Appreciate you dropping by.
I certainly won’t disagree with the basics of your argument but I do think there’s a little more going on than a new credit union. Non-residential building permits increased 67% last year to over 323,000,000 in Saskatoon alone. There may not be a lot of corporate headquarters but small business is alive and well and this is a very diversified economy.
May 13th, 2009 at 4:16 PM
“Non-residential building permits increased 67% last year to over 323,000,000 in Saskatoon alone.”
Oh, wait! Maybe that’s what it costs to build a credit union in Saskatoon now.
May 13th, 2009 at 4:16 PM
Hardy har har Norm…
There’s a lot of glass in that Credit Union – glass is expensive, you know.
I realize there is a lot of building going on in Saskatoon, but I would guess a lot of that $323 million is being spent north of 51st. I was always amazed when I lived there of how much industry and commercial business is in that corner of the city that nobody seems to know about (at least nobody my age did).
But what about downtown office space? Surely in a booming city such as Saskatoon, there must be a severe shortage of downtown office space as companies from across Canada and the world set up their head offices in the vibrant downtown core, right? Is that what the Barry is being torn down for?
All poking fun of aside (that wasn’t meant to be mean, just a little Calgary teasing) – I agree with your point that Saskatoon is much more small business orientated, but my experience has always been that small business often doesn’t equal big wages. Maybe I’m wrong, but most small businesses don’t need the university professionals who demand high pay. For example, while Cameco and Potash Corp certainly have a number of chartered accountants on staff, most small businesses would not have any need for those types of professionals. I can’t even count the number of places I worked at going through school where the books were done by the owner’s daughter or some lady who had been doing them for the past forty years. Are these the kinds of wages that can support that $350,000 home in Willow Grove? Just my thoughts.
May 13th, 2009 at 4:16 PM
Warren,
That was a joke but it wasn’t directed at you. More at the cost of construction in Saskatoon which has risen 1 bazzilion percent in the last two years.
Listen, you won’t get any argument from me that housing prices are out of whack. I’ve been arguing for months that affordability is hurting in a serious way. http://tinyurl.com/56h7n6 and http://tinyurl.com/6ceow8 This is why we’re seeing such a large percentage drop in unit sales.
As far as downtown office space is concerned, vacancy rates are very low. Northridge announced last week that they’re going to start construction on 50,000 square feet very soon. http://tinyurl.com/438xhw
Don’t forget River Landing which is supposed to bring 130,000 square feet as well. http://tinyurl.com/4zbppd
May 13th, 2009 at 4:16 PM
Okay, I’m watching the snow melt — it’s not as bad as it looked last night at 11:30! But I was watching the CTV news, which showed people playing beach volleyball in TO, so it seemed pretty bad.
Never mind, I get on a plane in 10 days.
Warren, you’re perfectly right, and both you and Jim are saying things that have been said lots of times: if you don’t have experience with larger centres, Saskatoon looks rich and booming. But if you’ve lived in bigger places it looks much less impressive. Calgary isn’t my favorite place — I’m the opposite of Alex, I like my cities BIG (TO big, London big, NYC big) but
And yeah, I don’t think that wages will rise like mad unless the economy really does go nuts.
May 13th, 2009 at 4:17 PM
Norm — oddly enough, the downtown office space is indicative of growth. Although there’s so little that I’d imagine *any* growth is significant.
Still lots of parking lots downtown, though.
May 13th, 2009 at 4:17 PM
oK all of you!
Now I’m cranky.
Trauzzi, did you instigate this?
Did you guys send this cold snow to mess up my cherry blossoms or to get back at me for the Fat Lady comment? I had plans to suntan and have a beer on my deck today after my open house. Not nice boys.
Don’t you guys know we think a Winter Tire is the street name where you will find a Tim Horton’s. You know, like the one I saw in National Geographic! .>)
May 13th, 2009 at 4:17 PM
Norm,
the Snowbirds can fly advertisements for her other new song “Don’t Blame Me” as a sky-banner. That tune will nock-em dead.
Ha – gotcha thinking about the possibilties.
Do you think us Realtor types will have to get our cars painted with that title? We could get some hints from the guy in Vegas with the “Foreclosure Express” van. .>)
May 13th, 2009 at 4:18 PM
Norm,
Can you believe one analyst in the US is saying that Canada will be in similar turmoil in 6-9 months! Some people sure put their neck on the line to make bold predictions.
May 13th, 2009 at 4:21 PM
Some great news in regards to housing coming out in the news the past couple of days. It’s quite amusing how after the Globe and Mails announcement that the “Housing Boom” was over many doom and gloom articles are now appearing in the news. I especially loved this quote from the Globe and Mail:
“The party’s over, Canada, Look at the U.S. for what’s to come.”
http://tinyurl.com/3fazjv
It is being said that Calgary is going to be the epdicenter of the housing crash in Canada. Lets just hope that the umbrella of that crash makes its way over to Saskatoon and similarily brings our market back to reality.
May 13th, 2009 at 4:22 PM
AMEN, Hoping for a crash!
May 13th, 2009 at 4:22 PM
As someone who bought a house this past fall, and who bought a home much humbler than expected all I can say is that if the market “corrects itself” I hope that it completely frieken tanks.
That being sad, while I am certain that housing prices here can only be described as completely ridiculous, I would expect a slowdown, and maybe even a slight drop as investors get out, I wouldn’t count on a crash.
May 13th, 2009 at 4:22 PM
So watching TV, those nice family homes they reno are still only worth like $300, 000 after, which is what a condo costs here … thinking about moving to the states and buying a super cheap house, maybe Miami, they probably don’t have snow now!
May 13th, 2009 at 4:22 PM
Norm,
When can we expect to get the 14-18 week in review numbers?
May 13th, 2009 at 4:23 PM
Why don’t buyers just refuse to over bid? I am. There are a lot of places available now, seems like a lot more cheap, well not compared to a year ago but cheaper than even a few weeks ago, housing in the mid 200′s is available. Sure that if I was in love with one house it might be different, but as an example, there are at least 4 quite similar bungalows in College Park all mid 200′s, why the heck would I offer more than list? If I don’t get it, there are other options. I think buyers are making it difficult on themselves by offering more than they should. Worst case scenario, I rent for a few more months, yes rent is expensive, but in the past couple weeks alone, I now have properites $20 – 40,000 cheaper than if I had rushed to bid even asking a few weeks ago.
May 13th, 2009 at 4:27 PM
jrochest,
I suppose one should also keep in mind that unit sales were up 42% in March 2007 over the previous year. The current numbers put us more or less on par with the March 2006.
Larry,
The “foreclosure bus tour” strikes me as a bit of undignified promotion but I guess there’s not much dignity in not being able to pay your bills either. I understand that the agents who are using this approach are having good success with it. I laughed out loud when I saw one agent painted on the side of a bus wearing a tuxedo. Very classy.
Heather,
I certainly can believe that someone would say it, but I do question whether things can get that bad here. The big difference between the US and Canada is thaat we don’t have many people who are behind in servicing their mortgages. I feel pretty confident though that the recent news about Canadian housing will likely find some roots.
Hoping,
Thanks for the link! Interesting story. I assume the same one Heather was referring to?
Robin,
Best wishes for a happy future.
ItchyScratchy,
You just bought a house and you’re hoping the market will “tank?” 10 points for having the most generous attitude in the world.
Julia,
You may not have a bad idea there. Further to my comment above about the foreclosure bus tour, I heard from one agent yesterday who said there is a good selection of decent homes going 30-50% off of their highs. I know some guys in Phoenix who are doing most of their business with Canadians right now. With the strength of our dollar, I would ceratinly be looking in that direction if I were an investor. I think foreclosures will likely continue there for awhile but I’m betting that buying activity starts to pick up quite a bit in Q3. Many of those markets are now affordable once again.
May 13th, 2009 at 4:28 PM
Downtown office space indicates growth? Sure, but in Saskatoon, we have really low office rent down town, much less than Regina, whose housing prices are like a hundred grand less. And downtown still reminds me of Moose Jaw, lacking decent size office towers or any real commercial presence.
May 13th, 2009 at 4:28 PM
Wesco,
In about an hour. Working on it now.
Grant,
Interesting that the weekly numbers are still pushing the all time highs. I’m with you though. I think at this point I’d likey avoid anything with “delayed presentation of offers.” There is enough stuff out there selling at or below asking price. I think we’ll see this approach drop off fairly quickly in the weeks ahead.
Jim,
We were recently offered a renewal on a downtown lease at +40% from our last rate. We’re moving!
May 13th, 2009 at 4:28 PM
You still see a lot of empty buildings down town, and a pretty low density over all in central Saskatoon, with undersized and dumpy one to two story buildings and parking lots.
May 13th, 2009 at 4:29 PM
Norm,
That is indeed the article I was referring to. Canada shouldn’t be hit as hard simply because we don’t have the subprime mess the U.S. does.
Grant,
I completely agree. If buyers aren’t underbidding they are FOOLS! Underbids have actually stayed pretty consistent since winter, so that’s good. I would also personally avoid any listings with “delayed presentation of offers”, or “won’t last – act fast”, that just irks me.
ItchyScratchy,
I too doubt the market will “tank”, but it should correct a fair bit. Now that you’re in the real estate game, it doesn’t much matter what the market does, you’ll still have your house and it will be priced accordingly. (Unless a person plans on flipping a property, then they will be S.O.L.) :’)
May 13th, 2009 at 4:29 PM
Seems there are more places available everyday and a lot of the signs on my block have been up for a while…
May 13th, 2009 at 4:29 PM
Yeah, I think I commented on this earlier, I know others have, I see a lot of for sale signs in the areas around my house. I think more than before, some with Alberta phone numbers on them. Here’s hoping that investors trying to cash out at the peak helps to drive prices down a bit. Would make staying here after graduation a possibility for a lot of recent U of S grads who are likely looking to Alberta to make more money so that they can save up enough to come back here some day.
May 13th, 2009 at 4:29 PM
I note the irony in hoping that speculators make money as they cash out, but it’s the lesser of two evils if them selling off now helps to drive down prices for the rest of us as supply steadily increases.
May 13th, 2009 at 4:30 PM
The speculators are cashing out in my area too. Lots of 780 area codes on the for sale signs in my neigbourhood. The wave of college grads selling their houses as they move elsewhere to get good jobs should increase the supply of cheap condos and town houses on the market as well.